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Regulation

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  • Merrill Lynch has agreed to pay a $500,000 fine to settle claims that it failed to have effective supervision of its total return swaps business.
  • Regulators must cooperate on derivatives legislation to avoid extraterritoriality issues, according to delegates at the Eleventh Annual Institute on Securities Regulation in Europe conference yesterday in London.
  • Industry officials fear that some European regulators do not have enough staff to manage the volume of prospectuses that will need to be approved when the amended E.U. prospectus directive takes effect later this year.
  • Foreign dealers are expected to start joining Japan’s clearinghouse for interest rate swaps after the Japan Securities Clearing Corp. recently detailed plans to cap membership liability payments to the guarantee fund for multiple defaults.
  • Greece has not yet triggered a credit event and buyers will therefore not receive a payout on credit default swaps, the Europe, Middle East and Africa determinations committee of the International Swaps and Derivatives Association said this morning.
  • Foreign multinational investment banks in India are sitting on the sidelines in the new credit default swap market. They’re not willing to take on the cost of collateralizing the deals and so aren’t targeting the market in any way, according to market officials.